A business owned by Mel Madrigal was short of cash and she decided to form a partnership with Gel Panganiban, who was able to contribute cash twice (2x) the interest of Mel in the new partnership. The assets contributed by Mel appeared as follows in the balance sheet of her business: Cash, P4,500; Accounts Receivable P94,500; Allowance for doubtful accounts of P3,000; Inventory P210,000; Store equipment P75,000 with an accumulated depreciation of P7,500. Mel and Gel agreed that the allowance for doubtful accounts was inadequate and should be P5,000. They also agreed that the fair value for the inventory is P230,000 and P60,000 for the store equipment. The cash contributed by Gel into the partnership was

FINANCIAL ACCOUNTING
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Chapter1: Financial Statements And Business Decisions
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A business owned by Mel Madrigal was short of cash and she decided to form a partnership with Gel
Panganiban, who was able to contribute cash twice (2x) the interest of Mel in the new partnership.
The assets contributed by Mel appeared as follows in the balance sheet of her business:
Cash, P4,500;
Accounts Receivable P94,500;
Allowance for doubtful accounts of P3,000;
Inventory P210,000;
Store equipment P75,000 with an accumulated depreciation of P7,500.
Mel and Gel agreed that the allowance for doubtful accounts was inadequate and should be
P5,000. They also agreed that the fair value for the inventory is P230,000 and P60,000 for the
store equipment. The cash contributed by Gel into the partnership was
Adam contributed P500,000 and Aldrin contributed his business valued at P450,000 to form a partnership.
Assets profits and losses are to be shared equally. They agreed to use the bonus approach. Adam should be
credited for
Transcribed Image Text:A business owned by Mel Madrigal was short of cash and she decided to form a partnership with Gel Panganiban, who was able to contribute cash twice (2x) the interest of Mel in the new partnership. The assets contributed by Mel appeared as follows in the balance sheet of her business: Cash, P4,500; Accounts Receivable P94,500; Allowance for doubtful accounts of P3,000; Inventory P210,000; Store equipment P75,000 with an accumulated depreciation of P7,500. Mel and Gel agreed that the allowance for doubtful accounts was inadequate and should be P5,000. They also agreed that the fair value for the inventory is P230,000 and P60,000 for the store equipment. The cash contributed by Gel into the partnership was Adam contributed P500,000 and Aldrin contributed his business valued at P450,000 to form a partnership. Assets profits and losses are to be shared equally. They agreed to use the bonus approach. Adam should be credited for
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